Apologetic SAP confirms misconduct in South Africa

JOHANNESBURG – SYSTEMS Applications Products (SAP) has offered an apology and opened formal disciplinary proceedings after a probe found indications of misconduct in the management of Gupta-related third parties in South Africa.

The proceedings have been opened despite the company disclosing to date, the investigation had not revealed any evidence of a payment to a South African government official, including Transnet and Eskom employees.

Adaire Fox-Martin, member of the Executive Board of SAP who is leading the probe, said the aforementioned disciplinary proceedings against the three executives, who are on administrative leave, would be held in accordance with South African labour law.

The investigation has found that the fourth employee placed on administrative leave had no material involvement with Gupta-related parties.

The exonerated employee will return to work.

SAP said it has had been clear from the outset that it would not tolerate misconduct or wrongdoing.

Fox-Martin apologised for the allegations of wrongdoing in its South African business and said they had a profound impact on employees, customers, partners and on the South African public.
“…and we apologize wholeheartedly for this.”

Four contracts are at the centre of controversy in South Africa.

The company disclosed it received revenue totalling approximately R660 million (approximately US$ 48 million), and paid commissions to entities
currently understood to be Gupta-related totalling approximately R 94 million (approximately $6,8 million).

The amounts paid to the third parties totalled approximately R107 million.

Meanwhile, the SAP Executive Board has decided to eliminate sales commissions on all public sector deals in countries with a Corruption Perceptions Index (according to Transparency International) below 50, effective immediately. South Africa’s rating is 45.

SAP will allocate additional legal compliance staff to the SAP Africa market unit. They will be based in South Africa and report into SAP’s Global Compliance organization.

SAP will further strengthen its Compliance Committee in the SAP Africa region, consisting of local management, compliance and other corporate
functions, to ensure individual deal sanity and integrity and promote compliance generally.